U.S. Stocks May See Initial Weakness On Disappointing Tech Earnings News

Following the mixed performance seen in the previous session, stocks may move to the downside in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.

Technology stocks may extend the notable pullback seen in the previous session, as reflected by the 1.0 percent slump by the Nasdaq 100 futures.

A steep drop by shares of Alphabet (GOOGL) is likely to weigh on the tech sector, with the Google parent tumbling by 5.5 percent in pre-market trading.

Alphabet is under pressure after reporting fourth quarter results that beat estimates on the top and bottom lines but weaker than expected ad revenue.

Chipmaker Advanced Micro Devices (AMD) is also likely to come under pressure after reporting fourth quarter earnings in line with estimates but providing disappointing first quarter guidance.

Shares of Microsoft (MSFT) are also seeing some pre-market weakness after the software giant reported better than expected fiscal second quarter results but forecast third quarter revenues below estimates.

Meanwhile, shares of Boeing (BA) are likely to see initial strength after the aerospace giant reported a narrower than expected fourth quarter loss.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.

While the Fed is widely expected to leave interest rates unchanged, the accompanying statement could have a significant impact on the outlook for rates.

Optimism about a March rate cut has faded recently, with many economists now suggesting the Fed will wait until May to begin lowering rates.

In U.S. economic news, payroll processor ADP released a report showing private sector job growth in the U.S. slowed by more than expected in the month of January.

ADP said private sector employment rose by 107,000 jobs in January after climbing by a downwardly revised 158,000 jobs in December.

Economists had expected private sector employment to increase by 145,000 jobs compared to the addition of 164,000 jobs originally reported for the previous month.

Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of January.

The Chicago business barometer is expected to inch up to 48.0 in January from 46.9 in December, but a reading below 50 would still indicate contraction.

After ending Monday’s session firmly in positive territory, the major U.S. stock indexes turned in a mixed performance during trading on Tuesday. While the tech-heavy Nasdaq showed a notable pullback, the Dow climbed to a new record closing high.

The Dow ended the day up 133.86 points or 0.4 percent at 38,467.31, while the Nasdaq slid 118.15 points or 0.8 percent to 15,509.90. S&P 500 bounced back and forth across the unchanged line before closing down 2.96 points or 0.1 percent at 4,924.97.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index climbed by 0.6 percent, while China’s Shanghai Composite Index tumbled by 1.5 percent.

Meanwhile, the major European markets have all moved modestly higher on the day. While the German DAX Index is just above the unchanged line, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both up by 0.2 percent.

In commodities trading, crude oil futures are slumping $0.93 to $76.89 a barrel after jumping $1.04 to $77.82 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,056, up $5.10 compared to the previous session’s close of $2,050.90. On Tuesday, gold rose $6.30.

On the currency front, the U.S. dollar is trading at 147.56 yen compared to the 147.61 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0851 compared to yesterday’s $1.0845.